The Responsible Gold Mining Principles consist of ten ‘umbrella’ Principles and 51 more granular statements that set out expectations of implementing companies. In a series of articles, we will briefly review the key tenets that underlie each of the Principles.
Principle 1 states that: ‘we will conduct our business with integrity including absolute opposition to corruption’. Although most people refer to ‘Environment, Social and Governance’ frameworks, the RGMPs are based on the belief that governance forms a vital foundation for the rest of the ESG agenda. Supporting Principle 1 are seven more detailed requirements which set out detailed expectations around how good governance can be delivered.
Principle 1.1 underlines the critical importance of company compliance with the rule of law, including all applicable host country, home country and international laws. It insists on management systems to deliver on this objective.
Principle 1.2 requires each implementing company to publish a Code of Conduct that sets out clear standards of conduct expected of all employees and business partners with appropriate compliance mechanisms.
Principle 1.3 sets out an unequivocal stance on combating bribery and corruption in all their forms, including in areas like conflicts of interest and anti-competitive behaviour.
Principles 1.4 and 1.5 deal with the related topics of political contributions and transparency. If political contributions are made, then their beneficiaries have to be declared. The emphasis on transparency is about building stakeholder trust and support for good governance, including putting the tax revenues generated by mining to good use for development in producing countries. Support is declared for the Extractive Industries Transparency Initiative (EITI). Principle 1.5 also commits implementing companies to publish their payments to host and home country governments – which is required in Canada and the EU, even in the absence of a legal requirement to do so. Companies are also encouraged to work with governments and other stakeholders to promote greater transparency around revenue flows, mining contracts and the beneficial owners of mineral licences.
Principle 1.6 deals with tax and transfer pricing. Its inclusion was the result of feedback received during the consultations around the RGMPs. Many people saw this as an area where extractive companies need to be unequivocal about their tax policies and to be seen to pay fair shares to host governments. On the issue of transfer pricing, implementing companies commit to pursue outcomes in line with fair business practices and with reference to where value is created.
Finally, Principle 1.7 requires that once fully up and running, each implementing company must report annually on their performance against the RGMPs and it must be clear where accountability lies for these issues within the Board and/or Executive Committee.